A parliamentary panel raised alarms regarding the misuse of funds from the District Mineral Foundation (DMF). This fund is designed to support communities affected by mining activities. The panel’s concerns highlight issues in the management and utilisation of these funds across various states in India.
What is the District Mineral Foundation?
The District Mineral Foundation is a statutory fund established in India. It aims to benefit districts impacted by mining operations. The fund is part of the Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY). It focuses on sustainable development and welfare of mining-affected communities.
Purpose and Objectives of the DMF
The DMF is intended to ensure that funds are used for the welfare of local communities. Its objectives include improving infrastructure, education, health services, and livelihood opportunities. The fund aims to address the socio-economic challenges faced by these communities.
Current Status of DMF Funds
As of January 2025, DMF has collected over ₹1,04,250.74 crore across 645 districts in 23 states. The fund has sanctioned approximately 3.69 lakh projects worth ₹88,483.24 crore. Out of these, around 2.08 lakh projects have been completed, with expenditures reaching ₹55,923.65 crore.
Issues of Fund Diversion
The parliamentary committee reported numerous cases of fund diversion. These funds have been misallocated to state treasuries or relief funds instead of their intended purposes. Such actions violate the mining act that established the DMF. The committee stressed that these diversions undermine the fund’s original goals.
Recommendations by the Parliamentary Committee
The committee urged the government to take strict measures against fund diversion. It recommended imposing penalties on DMFs for unauthorized transfers. Additionally, it called for enhanced oversight and transparency in fund management. The aim is to ensure that the funds serve their intended purpose effectively.
Government’s Response
In response to the committee’s concerns, the Ministry of Mines has issued orders to prevent unauthorised fund transfers. The government is expected to monitor and report any instances of fund diversion. This initiative aims to reinforce the integrity of the DMF system.
Impact on Mining-Affected Communities
The diversion of DMF funds can severely impact mining-affected communities. It can hinder development projects that are crucial for improving local living conditions. Ensuring proper fund utilisation is vital for the sustainable development of these regions.
Future Prospects
Addressing the issues surrounding DMF fund management is essential. Strengthening regulations and enhancing accountability will be crucial for the fund’s success. The future of mining-affected communities depends on effective utilisation of these resources.
Questions for UPSC:
- Examine the role of the District Mineral Foundation in promoting sustainable development in mining regions.
- Discuss the implications of fund diversion on the welfare of mining-affected communities.
- What measures can be implemented to ensure transparency in the management of public funds? Critically discuss.
- Analyse the impact of mining activities on local economies and communities. Provide suitable examples.
Answer Hints:
1. Examine the role of the District Mineral Foundation in promoting sustainable development in mining regions.
- The DMF is a statutory fund aimed at benefitting districts impacted by mining operations.
- It supports sustainable development initiatives, focusing on infrastructure, health, education, and livelihood opportunities.
- The fund is aligned with the Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY) for effective resource utilization.
- DMF projects aim to address socio-economic challenges faced by mining-affected communities.
- By funding local development projects, DMF plays important role in improving the quality of life in these regions.
2. Discuss the implications of fund diversion on the welfare of mining-affected communities.
- Fund diversion undermines the primary purpose of the DMF, which is to support local communities.
- Misallocation of funds can lead to inadequate infrastructure and social services in mining areas.
- Communities may experience worsened living conditions and hindered economic development due to lack of resources.
- Such diversions violate the mining act and diminish public trust in government initiatives.
- Long-term impacts include increased poverty and social unrest in mining-affected regions.
3. What measures can be implemented to ensure transparency in the management of public funds? Critically discuss.
- Implement stringent auditing processes to track the utilization of DMF funds effectively.
- Establish a public reporting system for fund allocation and project outcomes to enhance accountability.
- Encourage community participation in monitoring and decision-making processes to promote transparency.
- Impose penalties for unauthorized fund transfers to deter misallocation practices.
- Utilize technology, such as blockchain, to create an immutable record of transactions and fund usage.
4. Analyse the impact of mining activities on local economies and communities. Provide suitable examples.
- Mining activities can boost local economies by creating jobs and increasing income levels.
- However, they can also lead to environmental degradation, affecting agriculture and local livelihoods.
- For example, in Jharkhand, mining has generated employment but caused displacement and loss of arable land.
- Communities may face health issues due to pollution, impacting overall well-being.
- Balancing economic benefits with environmental protection is crucial for sustainable development in mining regions.
